As filed with the Securities and Exchange Commission on November 30, 2012
Registration No. 333-______
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CHUM MINING GROUP INC.
(Exact name of Registrant as Specified in its Charter)
Nevada 1000 Applied for
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
14727 - 129th Street
Edmonton, Alberta
T6V 1C4
(780) 887-4998
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive Offices)
Business Filings Incorporated
311 S Division Street
Carson City, Nevada, 89703
Telephone 800-981-7183
(Name, address, including zip code, and telephone number, including area code
of Agent for Service)
Copies of all communication to:
Diane D. Dalmy
Attorney at Law
2000 East 12th Avenue
Suite 32/10B
Denver, Colorado 80206
303.985.9324 (telephone)
303.988.6954 (facsimile)
Approximate date of commencement of proposed sale to the public: As soon as
declared effective.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company. See definitions of "large
accelerated filer," "accelerated filer," and "smaller reporting company," in
Rule 12b-2 of the Exchange Act. (Check one.)
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
========================================================================================================
Title of Each Proposed Maximum Proposed Maximum
Class of Securities Amount to be Offering Price Aggregate Offering Amount of
To be Registered Registered Per Share(1) Price(1) Registration Fee
--------------------------------------------------------------------------------------------------------
Common Stock, $.001
par value(2) 10,000,000 $0.002 $20,000 $2.73*
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Total Registration Fee $20,000 $2.73*
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(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as
amended. Includes stock to be sold by the selling stockholder.
(2) The shares of common stock being registered hereunder are being registered
for resale by a certain selling stockholder named in the prospectus.
* Estimated amount
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
DEALER PROSPECTUS DELIVERY OBLIGATION
Until December 28, 2012, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
SUBJECT TO COMPLETION, DATED NOVEMBER 30, 2012
PROSPECTUS
CHUM MINING GROUP INC.
10,000,000 SHARES OF COMMON STOCK
The selling stockholder named in this prospectus, namely Wayne Cadence, our sole
executive officer and director, is offering 10,000,000 shares of common stock of
Chum Mining Group Inc. at $0.002 per common share. Mr. Cadence currently holds
100% of our common stock. The Company will not receive any of the proceeds from
the sale of these shares. The shares were acquired by the selling stockholder
directly from us in a private offering of our common stock that was exempt from
registration under the securities laws. The selling stockholder has set an
offering price for these securities of $0.002 per common share and an offering
period of 28 days from the initial effectiveness date of this prospectus. This
is a fixed price for the duration of the offering. The Company does not intend
to extend the offering beyond the 28 day offering period. The selling
stockholder, Mr. Cadence, is an underwriter, within the meaning of Section 2(11)
of the Securities Act. Any broker-dealers or agents that participate in the sale
of the common stock or interests therein are also be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit earned on any resale of the shares
may be underwriting discounts and commissions under the Securities Act. The
selling stockholder, Mr. Cadence, who is an "underwriter" within the meaning of
Section 2(11) of the Securities Act, is subject to the prospectus delivery
requirements of the Securities Act. See "Security Ownership of Certain
Beneficial Owners" for more information about the selling stockholder. Please
note that this registration statement covers the sale of 56% of the Company's
outstanding securities. All of the outstanding shares are currently held by the
selling shareholder, Mr. Cadence, the Company's sole director, officer,
stockholder, and promoter, and these shares were obtained after our date of
inception of June 1, 2012.
Our common stock is presently not traded on any market or securities exchange.
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE REFER
TO "RISK FACTORS" ON PAGE 6 OF THIS PROSPECTUS FOR DETAILS REGARDING THE RISKS
RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL AS WELL AS RISKS GENERALLY
ASSOCIATED WITH THE MINING EXPLORATION INDUSTRY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE
MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE
OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING
CIRCULAR OR OTHER SELLING LITERATURE.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Chum Mining Group Inc. qualifies as an "emerging growth company" as defined in
the Jumpstart our Business Startups Act (the "JOBS Act"), and will therefore be
subject to reduced public company reporting requirements.
Proceeds to the selling stockholder do not include offering costs, including
filing fees, printing costs, legal fees, accounting fees, and transfer agent
fees estimated at $2,675. The Company will pay these expenses.
This Prospectus is dated November 30, 2012
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY 3
RISK FACTORS 6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 13
USE OF PROCEEDS 13
DETERMINATION OF OFFERING PRICE 14
DILUTION 14
SELLING SECURITY HOLDER 14
PLAN OF DISTRIBUTION 15
DESCRIPTION OF SECURITIES TO BE REGISTERED 16
INTERESTS OF NAMED EXPERTS AND COUNSEL 17
INFORMATION WITH RESPECT TO THE REGISTRANT 17
DESCRIPTION OF BUSINESS 17
MANAGEMENTS DISCUSSION AND ANALYSIS 34
DIRECTORS AND EXECUTIVE OFFICERS 36
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE 37
FINANCIAL STATEMENTS F-1
2
SUMMARY INFORMATION
The following summary highlights some of the information in this prospectus. It
may not contain all of the information that is important to you. To understand
this offering fully, it is important that you read the entire prospectus
carefully, including the "RISK FACTORS" and our financial statements and the
notes accompanying the financial statements that appear elsewhere in this
prospectus. Unless otherwise specifically noted, the terms "Company," "we," "us"
or "our" refers to CHUM MINING GROUP INC.
CORPORATE BACKGROUND AND INFORMATION
CHUM MINING GROUP INC.
Chum Mining Group Inc. was organized under the laws of the State of Nevada on
June 1, 2012, to explore mineral properties in North America.
Chum Mining Group Inc. is engaged in the exploration for uranium and other
minerals. The Company has acquired one MTO mineral claim totaling 382.01
hectares. It is located in the Region of central British Columbia, about 20 km
southwest of the Town of Prince George, BC, on NTS Sheet 93G (Latitude: 51(0)39'
12 "N and Longitude: 123(0)1' 13" W). The property can be accessed via Highway
16 and by the dense network of logging roads in the area. We refer to these
mining claims as the PRWC Property. This property is without known reserves.
The PRWC Property comprises one MTO mineral claim containing twenty cell claim
units totaling 382.01 hectares.
BC Tenure # Work Due Date Staking Date Total Area (Ha.)
----------- ------------- ------------ ----------------
981629 April 21, 2013 April 21, 2012 382.01
We require an estimated total of $360,000 to implement the three phases of our
exploration plan. We have not yet commenced our exploration plan.
We are an exploration stage company and we have not realized any revenues to
date. We do not have sufficient capital to enable us to commence and complete
our exploration program. We will require financing in order to conduct the
exploration program described in the section entitled, "Business of the Issuer."
Our auditors have issued a going concern opinion, raising substantial doubt
about Chum Mining Group Inc.'s financial prospects and the Company's ability to
continue as a going concern.
We are not a "blank check company," as we do not intend to participate in a
reverse acquisition or merger transaction. Securities laws define a "blank check
company" as a development stage company that has no specific business plan or
purpose or has indicated that its business plan is to engage in a merger or
acquisition with an unidentified company or companies, or other entity or
person.
With its current assets, the Company can remain operational through 2013 if it
does not complete Phase 1 of its program and only pays the government fees to
keep the claims valid. However, the Company plans to raise the capital necessary
to fund our business through a private placement and public offering of our
common stock. The Company intends to work directly with private placees once
this registration statement is declared effective. The Company anticipates that
they will have either a private placement or additional funding from its founder
by the end of 2013 in order to conducts its operations.
Our offices are located at: 14727 - 129th Street, Edmonton, Alberta T6V 1C4.
Telephone: (780) 887-4998
3
THE OFFERING
Securities offered 10,000,000 shares of common stock
Selling stockholder Wayne Cadence
Offering price $0.002 per share
Shares outstanding prior to the
offering 18,000,000 shares of common stock
Shares to be outstanding after
the Offering 18,000,000 shares of common stock
Use of proceeds The Company will not receive any proceeds
from the sale of the common stock by the
selling stockholder.
4
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial information for the
Company. You should read this information together with the financial statements
and the notes thereto appearing elsewhere in this prospectus and the information
under "Plan of Operation."
CONSOLIDATED STATEMENTS OF INCOME
Period Ended
July 31, 2012
-------------
Revenues 0
Operating expenses 10,175
Net loss from operations 10,175
Net loss before taxes 10,175
Loss per share - basic and diluted 0.000
Weighted average shares outstanding basic 18,000,000
BALANCE SHEET DATA
At July 31, 2012
----------------
Cash and cash equivalents 19,825
Total current assets 19,825
Total assets 19,825
Common stock 18,000
Additional paid-in capital 12,000
Deficit accumulated during exploration period (10,175)
Total stockholders' equity 19,825
Total liabilities 0
5
RISK FACTORS
Investing in our securities involves a high degree of risk. In addition to the
other information contained in this registration statement, prospective
purchasers of the securities offered hereby should consider carefully the
following factors in evaluating the Company and its business.
The securities we are offering through this registration statement are
speculative by nature and involve an extremely high degree of risk and should be
purchased only by persons who can afford to lose their entire investment. We
also caution prospective investors that the following risk factors could cause
our actual future operating results to differ materially from those expressed in
any forward looking statements, oral, written, made by or on behalf of us. In
assessing these risks, we suggest that you also refer to other information
contained in this registration statement, including our financial statements and
related notes.
RISKS RELATED TO OUR COMPANY AND OUR INDUSTRY
THE COMPANY HAS NEVER EARNED A PROFIT AND WE ARE CURRENTLY OPERATING UNDER A NET
LOSS. THERE IS NO GUARANTEE THAT WE WILL EVER EARN A PROFIT.
From our inception to the period ended on July 31, 2012 the Company has not
generated any revenue. Rather, the Company incurred a net loss of $10,175 from
inception (June 1, 2012) through July 31, 2012. The Company does not currently
have any revenue producing operations. The Company is currently not operating
profitably, and it should be anticipated that it will operate at a loss at least
until such time when the production stage is achieved, if production is, in
fact, ever achieved.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
We will need to obtain additional financing in order to complete our business
plan. We currently do not have any operations and we have no income. We are an
exploration stage company and we have not realized any revenues to date. We do
not have sufficient capital to enable us to commence and complete our
exploration program and based on our current operating plan, we do not expect to
generate revenue that is sufficient to cover our expenses for at least the next
twelve months. We will require financing in order to conduct the exploration
program described in the section entitled, "Business of the Issuer." We need to
raise $30,000 to complete the first phase of our exploration program and
$330,000 to complete all three phases of our program. We do not have any
arrangements for financing and we may not be able to find such financing if
required. We will need to obtain additional financing to operate our business
for the next twelve months, and if we do not our business will fail. The Company
reasonably believes that it will have either a private placement or additional
funding from its founder by Spring 2013 in order to conduct its operations.
OUR COMPANY WAS RECENTLY FORMED, AND WE HAVE NOT PROVEN THAT WE CAN GENERATE A
PROFIT. IF WE FAIL TO GENERATE INCOME AND ACHIEVE PROFITABILITY AN INVESTMENT IN
OUR SECURITIES MAY BE WORTHLESS.
We have no operating history and have not proved we can operate successfully. We
face all of the risks inherent in a new business. If we fail, your investment in
our common stock will become worthless. From inception to the period ended on
July 31, 2012, we incurred a net loss of $10,175 and did not earn any revenue.
The Company does not currently have any revenue producing operations.
6
WE HAVE NO OPERATING HISTORY. THERE CAN BE NO ASSURANCE THAT WE WILL BE
SUCCESSFUL IN OUR MINERAL EXPLORATION ACTIVITIES.
The Company has no history of operations. As a result of our brief operating
history, there can be no assurance that that we will be successful exploring for
uranium or other minerals. Our future performance will depend upon our
management and its ability to locate and negotiate additional exploration
opportunities in which we can participate. There can be no assurance that we
will be successful in these efforts. Our inability to locate additional
opportunities, to hire additional management and other personnel, or to enhance
our management systems, could have a material adverse effect on our results of
operations. There can be no assurance that the Company's operations will be
profitable.
WE ARE CONTROLLED BY MR. WAYNE CADENCE, OUR SOLE EXECUTIVE OFFICER AND DIRECTOR,
AND, AS SUCH, YOU MAY HAVE NO EFFECTIVE VOICE IN OUR MANAGEMENT.
Upon the completion of this offering, Mr. Wayne Cadence, our sole Executive
Officer Director, will beneficially own 44% of our issued and outstanding common
stock, assuming he is able to sell all of the shares in this offering. If he
does not sell all of the shares in this offering, he will own more than 44% of
the shares. Mr. Cadence may exercise some control as a significant shareholder
over all matters requiring stockholder approval, including the possible election
of additional directors and approval of significant corporate transactions. If
you purchase shares of our common stock, you may have no effective voice in our
management.
WE ARE SOLELY GOVERNED BY MR. WAYNE CADENCE, OUR SOLE EXECUTIVE OFFICER AND
DIRECTOR, AND, AS SUCH, THERE MAY BE SIGNIFICANT RISK TO THE COMPANY OF A
CONFLICT OF INTEREST.
Mr. Wayne Cadence, our sole Executive Officer and Director, makes decisions such
as the approval of related party transactions, the compensation of Executive
Officers, and the overseeing of the accounting function. There will be no
segregation of executive duties and there may not be effective disclosure and
accounting controls to comply with applicable laws and regulations, which could
result in fines, penalties and assessments against us. Accordingly, the inherent
controls that arise from the segregation of executive duties may not prevail. In
addition, Mr. Cadence will exercise full control over all matters that typically
require the approval of a Board of Directors. Mr. Cadence's actions are not
subject to the review and approval of a Board of Directors and, as such, there
may be significant risk to the Company of a conflict of interest.
Our sole Executive Officer and Director exercises control over all matters
requiring stockholder approval including the election of Directors and the
approval of significant corporate transactions. Insofar as Mr. Wayne Cadence
makes all decisions as to which projects the Company undertakes, there is a risk
of a conflict of interest arising between the duties of Mr. Cadence in his role
as our sole Executive Officer and his own personal financial and business
interests in other business ventures distinct and separate from the interests of
the Company. His personal interests may not, during the ordinary course of
business, coincide with the interests of the stockholders and, in the absence of
the effective segregation of such duties, there is a risk of a conflict of
interest. We have not voluntarily implemented various corporate governance
measures. As such, stockholders have limited protections against the
transactions implemented by Mr. Cadence, conflicts of interest and similar
matters.
We have not adopted corporate governance measures such as an audit or other
independent committees and we presently only have one director. Stockholders
should bear in mind our current lack of corporate governance measures in
formulating their investment decisions.
7
BECAUSE WAYNE CADENCE, OUR SOLE EXECUTIVE OFFICER AND DIRECTOR, HAS OTHER
BUSINESS INTERESTS, HE MAY NOT BE ABLE OR WILLING TO DEVOTE A SUFFICIENT AMOUNT
OF TIME TO OUR BUSINESS OPERATIONS, WHICH MAY CAUSE OUR BUSINESS TO FAIL.
It is possible that the demands on Mr. Wayne Cadence, our sole Executive Officer
and Director, from other obligations could increase with the result that he
would no longer be able to devote sufficient time to the management of our
business. Mr. Cadence will devote fewer than 12-15 hours per month or 3-4 hours
per week to the affairs of the Company. In addition, Mr. Cadence may not possess
sufficient time to manage our business if the demands of managing our business
increased substantially.
WAYNE CADENCE, OUR SOLE EXECUTIVE OFFICER AND DIRECTOR, LACKS TECHNICAL TRAINING
IN MINERAL EXPLORATION OR MINING, AND MAY NOT BE FULLY AWARE OF THE REQUIREMENTS
WITHIN THE MINING INDUSTRY.
The management of the Company, our sole executive officer and director, Mr.
Cadence, despite being in the mining industry, has no technical training in
minerals exploration or mining, or technical training in exploring for,
starting, or operating a mine, and that with no direct training in these areas,
and as such, may not be fully aware of many of the specific requirements related
to working within the mining industry.
THE IMPRECISION OF MINERAL DEPOSIT ESTIMATES MAY PROVE ANY RESOURCE CALCULATIONS
THAT WE MAKE TO BE UNRELIABLE.
Mineral deposit estimates and related databases are expressions of judgment
based on knowledge, mining experience, and analysis of drilling results and
industry practices. Valid estimates made at a given time may significantly
change when new information becomes available. By their nature, mineral deposit
estimates are imprecise and depend upon statistical inferences, which may
ultimately prove unreliable. Mineral deposit estimates included here, if any,
have not been adjusted in consideration of these risks and, therefore, no
assurances can be given that any mineral deposit estimate will ultimately be
reclassified as reserves. If the Company's exploration program locates a mineral
deposit, there can be no assurances that any of such deposits will ever be
classified as reserves.
MR. WAYNE CADENCE HAS NOT PHYSICALLY INSPECTED THE SUBJECT PROPERTY AND DOES NOT
HAVE CURRENT PLANS TO VISIT THE PROPERTY.
Mr. Cadence has not visited the property, but has relied on property reports
prepared by people who are knowledgeable with the property. With respect to the
further exploration of the property, Mr. Cadence does not have any current plans
to visit the property but instead intends to hire various professionals and
consultants to further explore the property as this work is required. As the
Company will rely on third parties, the costs of exploration may be higher than
if the Company and its employees engaged in the work themselves. By not visiting
the property directly, Mr. Cadence will be unable to personally verify the
information and results that are presented by third parties.
WE ARE SENSITIVE TO FLUCTUATIONS IN THE PRICE OF MINERALS, WHICH IS BEYOND OUR
CONTROL. THE PRICE OF URANIUM AND OTHER MINERALS ARE VOLATILE AND PRICE CHANGES
ARE BEYOND OUR CONTROL.
The price of uranium and other minerals can fluctuate. The prices these minerals
have been and will continue to be affected by numerous factors beyond the
Company's control. Factors that affect the price of these minerals include the
demand from consumers for products that use uranium and other minerals, economic
8
conditions, over supply from secondary sources and costs of production. Price
volatility and downward price pressure, which can lead to lower prices, could
have a material adverse effect on the costs or the viability of our projects.
MINERAL EXPLORATION AND PROSPECTING IS A HIGHLY COMPETITIVE AND SPECULATIVE
BUSINESS AND WE MAY NOT BE SUCCESSFUL IN SEEKING AVAILABLE OPPORTUNITIES.
The process of mineral exploration and prospecting is a highly competitive and
speculative business. Individuals are not subject to onerous accreditation and
licensing requirements prior to beginning mineral exploration and prospecting
activities. As such, the company, in seeking available opportunities, will
compete with numerous individuals and companies, including established,
multi-national companies that have more experience and resources than the
Company. The exact number of active competitors at any one time is heavily
dependant on current economic conditions; however, statistics provided by the
AEBC (The Association for Mineral Exploration, British Columbia), state that
approximately 1000 mining companies operate in BC. Each one of these companies
can be considered to be in competition with our company for mineral resources in
British Columbia. Moreover, the Government of Canada at,
http://mmsd1.mMr.nrcan.gc.ca/mmsd/exploration/default_e.asp, reports that in
2006, CDN $140.6 billion was spent in mineral exploration activities in British
Columbia.
Because we may not have the financial and managerial resources to compete with
other companies, we may not be successful in our efforts to acquire projects of
value, which may, ultimately, become productive. However, while we compete with
other exploration companies for the rights to explore other claims, there is no
competition for the exploration or removal of mineral from our claims from other
companies, as we have no agreements or obligations that limit our right to
explore or remove minerals from our claims.
COMPLIANCE WITH ENVIRONMENTAL CONSIDERATIONS AND PERMITTING COULD HAVE A
MATERIAL ADVERSE EFFECT ON THE COSTS OR THE VIABILITY OF OUR PROJECTS. THE
HISTORICAL TREND TOWARD STRICTER ENVIRONMENTAL REGULATION MAY CONTINUE, AND, AS
SUCH, REPRESENTS AN UNKNOWN FACTOR IN OUR PLANNING PROCESSES.
All mining is regulated by the government agencies at the Federal and Provincial
levels of government in Canada. Compliance with such regulation has a material
effect on the economics of our operations and the timing of project development.
Our primary regulatory costs have been related to obtaining licenses and permits
from government agencies before the commencement of mining activities. An
environmental impact study that must be obtained on each property in order to
obtain governmental approval to mine on the properties is also a part of the
overall operating costs of a mining company.
The possibility of more stringent regulations exists in the areas of worker
health and safety, the dispositions of wastes, the decommissioning and
reclamation of mining and milling sites and other environmental matters, each of
which could have an adverse material effect on the costs or the viability of a
particular project. Compliance with environmental considerations and permitting
could have a material adverse effect on the costs or the viability of our
projects.
MINING AND EXPLORATION ACTIVITIES ARE SUBJECT TO EXTENSIVE REGULATION BY FEDERAL
AND PROVINCIAL GOVERNMENTS IN CANADA. ANY FUTURE CHANGES IN GOVERNMENTS,
REGULATIONS AND POLICIES, COULD ADVERSELY AFFECT THE COMPANY'S RESULTS OF
OPERATIONS FOR A PARTICULAR PERIOD AND ITS LONG-TERM BUSINESS PROSPECTS.
9
Mining and exploration activities are subject to extensive regulation by
government. Such regulation relates to production, development, exploration,
exports, taxes and royalties, labor standards, occupational health, waste
disposal, protection and remediation of the environment, mine and mill
reclamation, mine and mill safety, toxic substances and other matters.
Compliance with such laws and regulations has increased the costs of exploring,
drilling, developing, constructing, operating mines and other facilities.
Furthermore, future changes in governments, regulations and policies, could
adversely affect the Company's results of operations in a particular period and
its long-term business prospects.
The development of mines and related facilities is contingent upon governmental
approvals, which are complex and time consuming to obtain and which, depending
upon the location of the project, involve various governmental agencies. The
duration and success of such approvals are subject to many variables outside the
Company's control.
RISKS RELATED TO OUR FINANCIAL CONDITION AND BUSINESS MODEL
THE COMPANY HAS NOT PAID ANY CASH DIVIDENDS ON ITS SHARES OF COMMON STOCK AND
DOES NOT ANTICIPATE PAYING ANY SUCH DIVIDENDS IN THE FORESEEABLE FUTURE.
ACCORDINGLY, INVESTORS WILL ONLY SEE A RETURN ON THEIR INVESTMENTS IF THE VALUE
OF THE SHARES APPRECIATES.
Payment of future dividends, if any, will depend on earnings and capital
requirements of the Company, the Company's debt facilities and other factors
considered appropriate by the Company's Board of Directors. To date, the Company
has not paid any cash dividends on the Company's Common Stock and does not
anticipate paying any such dividends in the foreseeable future. Accordingly,
investors will only see a return on their investments if the value of the
Company's shares appreciates.
IF WE DO NOT CONDUCT MINERAL EXPLORATION ON OUR MINERAL CLAIMS AND KEEP THE
CLAIMS IN GOOD STANDING, THEN OUR RIGHT TO THE MINERAL CLAIMS WILL LAPSE AND WE
WILL LOSE EVERYTHING THAT WE HAVE INVESTED AND EXPENDED TOWARDS THESE CLAIMS.
We must complete mineral exploration work on our mineral claims and keep the
claims in good standing. If we do not fulfill our work commitment requirements
on our claims or pay the fee to keep the claims in good standing, then our right
to the claims will lapse and we will lose all interest that we have in these
mineral claims. We are obligated to pay $3,820 in lieu of work to the British
Columbia Provincial government on an annual basis to keep our claims in good
standing. Our claims are due on April 21, 2013.
BECAUSE OF OUR LIMITED RESOURCES AND THE SPECULATIVE NATURE OF OUR BUSINESS,
THERE IS A SUBSTANTIAL DOUBT AS TO OUR ABILITY TO OPERATE AS A GOING CONCERN.
The report of our independent auditors, on our audited financial statements for
the audited period ended July 31, 2012 indicates that there are a number of
factors that raise substantial doubt about our ability to continue as a going
concern. Our continued operations are dependent on our ability to obtain
financing and upon our ability to achieve future profitable operations from the
development of our mineral properties. If we are not able to continue as a going
concern, it is likely investors will lose their investment.
10
RISKS RELATED TO THIS OFFERING AND OUR STOCK
WE WILL NEED TO RAISE ADDITIONAL CAPITAL. IN SO DOING, WE WILL FURTHER DILUTE
THE TOTAL NUMBER OF SHARES ISSUED AND OUTSTANDING. THERE CAN BE NO ASSURANCE
THAT THIS ADDITIONAL CAPITAL WILL BE AVAILABLE OR ACCESSIBLE BY US.
Chum Mining Group Inc. will need to raise additional capital by issuing
additional shares of common stock and will, thereby, increase the number of
common shares outstanding. There can be no assurance that this additional
capital will be available to meet these continuing exploration and development
costs or, if the capital is available, that it will be available on terms
acceptable to the Company. If the Company is unable to obtain financing in the
amounts and on terms deemed acceptable, the business and future success of the
Company will almost certainly be adversely affected. If we are able to raise
additional capital, we cannot be assured that it will be on terms that enhance
the value of our common shares.
IF WE COMPLETE FINANCING THROUGH THE SALE OF ADDITIONAL SHARES OF OUR COMMON
STOCK IN THE FUTURE, THEN OUR STOCKHOLDERS WILL EXPERIENCE DILUTION.
The most likely source of future financing presently available to us is through
the sale of shares of our common stock. Any sale of common stock will result in
dilution of equity ownership to stockholders. This means that if we sell shares
of our common stock, more shares will be outstanding and each stockholder will
own a smaller percentage of the shares then outstanding. To raise additional
capital we may have to issue additional shares, which may substantially dilute
the interests of stockholders. Alternatively, we may have to borrow large sums,
and assume debt obligations that require us to make substantial interest and
capital payments.
THERE IS NO MARKET FOR OUR COMMON STOCK, WHICH LIMITS OUR STOCKHOLDERS ABILITY
TO RESELL THEIR SHARES OR PLEDGE THEM AS COLLATERAL.
There is currently no public market for our shares, and we cannot assure you
that a market for our stock will develop. Consequently, investors may not be
able to use their shares for collateral or loans and may not be able to
liquidate at a suitable price in the event of an emergency. In addition,
investors may not be able to resell their shares at or above the price they paid
for them or may not be able to sell their shares at all.
IF A PUBLIC MARKET FOR OUR STOCK IS DEVELOPED, FUTURE SALES OF SHARES COULD
NEGATIVELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK.
If a public market for our stock is developed, then sales of Common Stock in the
public market could adversely affect the market price of our Common Stock. There
are at present 18,000,000 shares of Common Stock issued and outstanding.
OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S
PENNY STOCK REGULATIONS AND THE NASD'S SALES PRACTICE REQUIREMENTS, WHICH MAY
LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.
The Company's common shares may be deemed to be "penny stock" as that term is
defined in Regulation Section "240.3a51-1" of the Securities and Exchange
Commission (the "SEC"). Penny stocks are stocks: (a) with a price of less than
U.S. $5.00 per share; (b) that are not traded on a "recognized" national
exchange; (c) whose prices are not quoted on the NASDAQ automated quotation
system (NASDAQ - where listed stocks must still meet requirement (a) above); or
11
(d) in issuers with net tangible assets of less than U.S. $2,000,000 (if the
issuer has been in continuous operation for at least three years) or U.S.
$5,000,000 (if in continuous operation for less than three years), or with
average revenues of less than U.S. $2,675,000 for the last three years.
Section "15(g)" of the United States Securities Exchange Act of 1934, as
amended, and Regulation Section "240.15g(c)2" of the SEC require broker dealers
dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in the Company's common
shares are urged to obtain and read such disclosure carefully before purchasing
any common shares that are deemed to be "penny stock".
Moreover, Regulation Section "240.15g-9" of the SEC requires broker dealers in
penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. This procedure requires
the broker dealer to: (a) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (b)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (c) provide the investor with a written statement
setting forth the basis on which the broker dealer made the determination in
(ii) above; and (d) receive a signed and dated copy of such statement from the
investor confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company's
common shares to resell their common shares to third parties or to otherwise
dispose them of. Stockholders should be aware that, according to Securities and
Exchange Commission Release No. 34-29093, dated April 17, 1991, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:
(i) control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer
(ii) manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases
(iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons
(iv) excessive and undisclosed bid-ask differential and markups by selling
broker-dealers
(v) the wholesale dumping of the same securities by promoters and
broker-dealers after prices have been manipulated to a desired level,
along with the resulting inevitable collapse of those prices and with
consequent investor losses
Our management is aware of the abuses that have occurred historically in the
penny stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
12
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. Forward-looking statements in this prospectus include, among
others, statements regarding our capital needs, business plans and expectations.
Such forward-looking statements involve assumptions, risks and uncertainties
regarding, among others, the success of our business plan, availability of
funds, government regulations, operating costs, our ability to achieve
significant revenues, our business model and products and other factors. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may", "will", "should",
"expect", "plan", "intend", "anticipate", "believe", "estimate", "predict",
"potential" or "continue", the negative of such terms or other comparable
terminology. These forward-looking statements address, among others, such issues
as:
* the amount and nature of future exploration, development and other
capital expenditures,
* mining claims to be drilled,
* future earnings and cash flow,
* development projects,
* exploration prospects,
* drilling prospects,
* development and drilling potential,
* business strategy,
* expansion and growth of our business and operations, and
* our estimated financial information.
In evaluating these statements, we believe that it is important that you
consider various factors, including the assumptions, risks and uncertainties
outlined in this prospectus under "Risk Factors". These factors or any of them
may cause our actual results to differ materially from any forward-looking
statement made in this prospectus. While these forward-looking statements, and
any assumptions upon which they are based, are made in good faith and reflect
our current judgment regarding future events, our actual results will likely
vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. The forward-looking
statements in this prospectus are made as of the date of this prospectus and we
do not intend or undertake to update any of the forward-looking statements to
conform these statements to actual results, except as required by applicable
law, including the securities laws of the United States.
USE OF PROCEEDS TO ISSUER
We will not receive any proceeds from the sale of the common stock offered
through this prospectus by the selling stockholder.
13
DETERMINATION OF OFFERING PRICE
The shares of common stock covered by this prospectus will be offered for sale
at a fixed price of $0.002 per share. As the Company has yet to generate any
revenue, and has not begun business operations, the Company has deemed this to
be an appropriate offering price.
DILUTION
The common stock to be sold by the selling stockholder is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to
stockholders.
SELLING SECURITY HOLDER
Wayne Cadence Chief Executive Officer, Chief Financial
Officer, President, Secretary, Treasurer
and Director (Principal Executive
Officer and Principal Accounting
Officer)
Securities offered 10,000,000 shares of common stock
Selling stockholder(s) Wayne Cadence
Offering price $0.002 per share
Shares outstanding prior to
the offering 18,000,000 shares of common stock
Shares to be outstanding after
the offering 18,000,000 shares of common stock
Percentage of the class to be
owned by selling stockholder
after the offering 44%
Use of proceeds Chum Mining Group Inc. will not receive
any proceeds from the sale of the common
stock by the selling stockholder.
14
PLAN OF DISTRIBUTION
The selling stockholder or their donees, pledges, transferees or other
successors-in-interest selling shares received after the date of this prospectus
from a selling stockholder as a gift, pledge, distribution or otherwise, may,
from time to time, sell any or all of their shares of common stock on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions. These sales will be at $0.002 for an offering period of 28
days from the initial effectiveness date of this prospectus. The Company has not
yet applied for quotation on any stock exchange, market, or trading facility.
The selling stockholder may use any one or more of the following methods when
selling shares:
* ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
* block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account;
* an exchange distribution following the rules of the applicable
exchange;
* privately negotiated transactions;
* short sales that are not violations of the laws and regulations of any
state of the United States;
* through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
* broker-dealers may agree with the selling stockholder to sell a
specified number of such shares at par value $0.001; and
* a combination of any such methods of sale or any other lawful method.
The selling stockholder may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of selling
stockholder to include the pledgee, transferee or other successors-in-interest
as selling stockholder under this prospectus. The selling stockholder also may
transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors-in-interest will be the selling
beneficial owners for purposes of this prospectus.
In connection with the sale of our common stock or interests therein, the
selling stockholder may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholder also may sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholder also may enter into option or other transactions with broker-dealers
or other financial institutions for the creation of one or more derivative
securities which require the delivery to the broker-dealer or other financial
institution of shares offered by this prospectus, which shares the broker-dealer
or other financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect the transaction).
The aggregate proceeds to the selling stockholder from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. A selling stockholder reserves the right to
accept and, together with its agents from time to time, to reject, in whole or
15
in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering.
The selling stockholder, Mr. Cadence, and any underwriters, broker-dealers or
agents that participate in the sale of the common stock or interests therein are
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act. A
selling stockholder that is an "underwriter" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.
REGULATION M
We plan to advise the selling stockholder that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling security holders and their affiliates.
Regulation M under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for, or purchasing for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Accordingly, the selling stockholder are not
permitted to cover short sales by purchasing shares while the distribution of it
taking place. Regulation M also governs bids and purchases made in order to
stabilize the price of a security in connection with a distribution of the
security. In addition, we will make copies of this prospectus available to the
selling stockholder for the purpose of satisfying the prospectus delivery
requirements of the Securities Act.
STATE SECURITIES LAWS
Under the securities laws of some states, the shares may be sold in such states
only through registered or licensed brokers or dealers. In addition, in some
states the common shares may not be sold unless the shares have been registered
or qualified for sale in the state or an exemption from registration or
qualification is available and is complied with.
EXPENSES OF REGISTRATION
We are bearing substantially all costs relating to the registration of the
shares of common stock offered hereby. These expenses are estimated to be
$2,675, including, but not limited to, legal, accounting, printing and mailing
fees. The selling stockholder, however, will pay any commissions or other fees
payable to brokers or dealers in connection with any sale of such shares common
stock.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The authorized capital stock of the Company at the end of the audited period on
July 31, 2012, consists of 75,000,000 shares of common stock, par value $0.001
per share, of which there are 18,000,000 shares issued and outstanding. The
following summarizes provisions of the Company's capital stock.
COMMON STOCK
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders; have no preemptive rights; have no
conversion or redemption rights or sinking fund; do not have cumulative voting
rights; and share ratably in dividends, if any, as may be declared from time to
time by the Board of Directors in its discretion from funds legally available
therefore. In the event of a liquidation, dissolution or winding up of the
company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
16
DIVIDENDS
Dividends, if any, will be contingent upon the Company's revenues and earnings,
if any, and capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, and
accordingly the Board of Directors does not anticipate declaring any dividends.
INTERESTS OF NAMED EXPERTS AND COUNSEL
M&K CPAS, PLLC, our independent registered public accountant, has audited our
financial statements included in this prospectus and Registration Statement to
the extent and for the periods set forth in their audit report. M&K CPAS, PLLC
has presented its report with respect to our audited financial statements.
Ms. Diane Dalmy, Attorney at Law, has provided an opinion upon certain matters
relating to the legality of the common stock offered hereby for us.
INFORMATION WITH RESPECT TO THE REGISTRANT
We have not previously been subject to the reporting requirements of the
Securities and Exchange Commission. We have filed with the Commission a
registration statement on Form S-1 under the Securities Act with respect to the
shares offered hereby. This prospectus does not contain all of the information
set forth in the registration statement and the exhibits and schedules thereto.
For further information with respect to our securities and us you should review
the registration statement and the exhibits and schedules thereto. Statements
made in this prospectus regarding the contents of any contract or document filed
as an exhibit to the registration statement are not necessarily complete. You
should review the copy of such contract or document so filed.
You can inspect the registration statement and the exhibits and the schedules
thereto filed with the commission, without charge, at the office of the
Commission at 100 F Street, NE, Washington, D.C. 20549. You can also obtain
copies of these materials from the public reference section of the commission at
100 F Street, NE, Washington, D.C. 20549, at prescribed rates. You can obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The Commission maintains a web site on the Internet that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission at
http://www.sec.gov
DESCRIPTION OF BUSINESS
Chum Mining Group Inc. was incorporated in the State of Nevada on June 1, 2012.
It was incorporated for the sole purpose of engaging in mineral exploration. It
has always maintained the same business plan from inception to present. Since
inception, the Company has not filed for bankruptcy, receivership or similar
proceeding; and there has not been any material reclassification, merger,
consolidation, or purchase or sale of a significant amount of assets not in the
ordinary course of business.
Chum Mining Group Inc., which is also referred to herein as Chum Mining Group
Inc. or the Company, is engaged in the exploration for uranium and other
minerals. The Company has acquired one mineral claim totaling 382.01 hectares,
17
which is registered with the British Columbia Mineral Title Office (MTO). It is
located in the Region of central British Columbia, about 20 km southwest of the
Town of Prince George, BC on NTS Sheet 93G (Latitude: 51(0) 39' 12"N and
Longitude: 123(0) 1' 13" W). The property can be accessed via Highway 16 and by
the dense network of logging roads in the area. We refer to these mining claims
as the PRWC Property. This property is without known reserves. This property was
purchased from Jervis Explorations Inc. The exploration plan for the property
was provided to the Company by the vendor of the Property, Jervis Explorations
Inc. The exploration program was developed by Gregory R. Thomson, Geoscientist
and Consulting Geologist, who developed an exploration program in 2007 for the
Property prior to the Company purchasing these mineral claims.
The Company was incorporated for the purpose of exploring mineral claims in
North America. The short-term strategy of the Company is to explore the PRWC
Property and to explore its commercial viability. The long-term strategy of the
Company is to continue to acquire additional mineral claims that complement its
core business. We have not yet commenced our exploration plan.
We are an exploration stage company and we cannot provide assurance to investors
that our mineral claims contain a commercially exploitable mineral deposit, or
reserve, until appropriate exploratory work is done and an economic evaluation
based on such work concludes economic feasibility.
PROPERTY ACQUISITION DETAILS
Chum Mining Group Inc. purchased the PRWC Property from Jervis Explorations Inc.
for $7,500 USD on June 1, 2012. The Company owns 100% of the rights to the
property, subject to a 3% net smelter royalty. There are no other underlying
rights or royalties on this property. In British Columbia, the acquisition of
mineral claims is done using an online application whereby a company or
individual can stake claims online. A mineral tenure is granted the available
subsurface rights at the time of issuance. For our property, the tenure includes
all subsurface minerals, as there were no other tenures on the property at time
of staking. The mineral rights must be renewed on April 21, 2013. The tenure
includes both mineral and placer mineral rights on the property.
In order to keep these claims in good standing, the Company must either complete
and report work on the property or pay a renewal fee prior to the expiry date on
April 21, 2013.
In British Columbia, a mineral or placer claim has a set expiry date, and in
order to maintain the claim beyond that expiry date, the recorded holder (or an
agent) must, on or before the expiry date, register either exploration and
development work that was performed on the claim, or a payment instead of
exploration and development. Failure to maintain a claim results in automatic
forfeiture at the end (midnight) of the expiry date; there is no notice to the
claim holder prior to forfeiture.
When exploration and development work or a payment instead of work is
registered, the claimholder may advance the claim forward to any new date. With
a payment instead of work the minimum requirement is 6 months, and the new date
cannot exceed one year from the current expiry date; with work, it may be any
date up to a maximum of ten years beyond the current anniversary year.
"Anniversary year" means the period of time from the last expiry date to the
next immediate expiry date.
All recorded holders of a claim must hold a valid miner's certificate when
either work or a payment is registered on the claim.
18
Clients need to register a certain value of work or a "cash-in-lieu of work"
payment to their claims in MTO. The following are the costs required to maintain
a claim for one year:
* MINERAL CLAIM - WORK REQUIREMENT:
* $5 per hectare for anniversary years 1 and 2;
* $10 per hectare for anniversary years 3 and 4;
* $15 per hectare for anniversary years 5 and 6; and
* $20 per hectare for subsequent anniversary years
* MINERAL CLAIM - CASH-IN-LIEU OF WORK:
* $10 per hectare for anniversary years 1 and 2;
* $20 per hectare for anniversary years 3 and 4;
* $30 per hectare for anniversary years 5 and 6; and
* $40 per hectare for subsequent anniversary years
* PLACER CLAIM - WORK REQUIREMENT:
* $20 per hectare
* PLACER CLAIM - CASH-IN-LIEU OF WORK:
* $40 per hectare
Exploration and development work is defined in section 1 of the MINERAL TENURE
ACT REGULATION as either physical exploration and development or technical
exploration and development.
"PHYSICAL EXPLORATION AND DEVELOPMENT" includes:
a. if the work is related to a mineral claim, any of the following:
i. trenching, open cuts, adits, pits, shafts and other underground
activity for the purposes of collecting samples or other
geological or technical information;
ii. reclamation related to exploration and development activities;
iii. ground control surveys, line cutting and grids that support an
activity described in paragraphs (b) to (h) of the definition of
technical exploration and development;
iv. precision survey techniques such as global positioning or surveys
conducted by a practising land surveyor;
v. global positioning surveys in accordance with section 20;
b. if the work is related to a placer claim, any of the following:
i. activities referred to in paragraph (a);
ii. panning, digging or washing of gravels to test for the presence
of economically significant minerals;
"TECHNICAL EXPLORATION AND DEVELOPMENT" for mineral claims and placer claims
includes:
a. archaeological impact assessments;
b. geological surveys and studies;
c. mineral resource or ore reserve calculations and related work;
d. geophysical surveys;
e. geochemical surveys;
f. drilling, including drilling for the purposes of collecting samples,
core logging or other geological or technical information;
g. analysis of mineral or rock samples including a bulk sample to assess
characteristics pertinent to the assessment of the mineral resource,
including acid base accounting, metallurgical, mineralogical,
beneficiation and petrological studies;
h. prospecting and exploring;
19
i. environmental baseline studies;
j. construction and maintenance of roads, trails, helicopter landing
sites, drill sites and drill core storage if required to support an
activity described in any of paragraphs (b) to (i);
k. preparation and geological interpretation of air photo, satellite or
other remotely sensed images that support an activity described in
paragraphs (a) to (i);
l. preparation of orthophoto and topological surveys that support an
activity described in paragraphs (a) to (i);
m. compilations of previous exploration and development studies and
reports if those compilations lead to new exploration and development;
n. any other similar activity that may be approved by the chief gold
commissioner before the exploration and development is done;
There were some significant changes in the fore-going that were introduced in
January 2005:
a. Road and trail work, whether construction or upgrading, cannot be
registered on its own as physical work; road and trail work is only
acceptable when it is part of a technical work program.
b. Travel and accommodation costs are not acceptable on their own; if
other physical or technical work was performed, travel and
accommodation costs may be included.
c. General property evaluations and similar activities are not
acceptable.
d. Ground control surveys, line cutting and grids cannot be registered as
stand-alone physical work, but only as part of a technical work
program.
20
[MAP SHOWING PROPERTY LOCATION]
FIG. 1 PRWC PROPERTY LOCATION MAP BC
21
[MAP SHOWING PROPERTY REGIONAL LOCATION]
FIG. 2 PRWC PROPERTY REGIONAL LOCATION MAP
22
1.2 LOCATION AND ACCESS
The PRWC Property is located in the region of central British Columbia,
approximately 20 km southwest of the City of Prince George. The property can be
reached by road from Prince George by following paved Highway 16 to a point 12
km west of the City Limits and then south for 4km along a dense network of
logging roads to the claim.
The City of Prince George is a regional population centre with many services and
amenities for industrial, educational and leisure activities. The airport at
Prince George has daily scheduled flights to Vancouver.
1.3 TOPOGRAPHY, CLIMATE, VEGETATION
The PRWC Property is situated in the Fraser plateau an area generally with
gentle relief, but deeply incised by the Fraser River and its tributaries.
Elevations on the property vary from 680m to 750 m above sea level. Vegetation
consists mainly of Lodge pole pine and Douglas fir. The climate is characterised
by hot and dry summers and cold but wetter winters. Most precipitation falls in
the form of snow during the wintertime. Snow cover prevails from mid-November
until early April.
1.4 PREVIOUS WORK
The property was previously staked by Andre M. Pauwels, however no other records
or prior exploration on the property could be found. As most of British
Columbia, the general area is covered by regional stream sediment surveys,
systematic wide spaced aeromagnetic coverage and regional geological mapping.
These data were generated by the Geological Survey of Canada and/or the BC
Geological Survey.
23
[MAP SHOWING PRWC PROPERTY]
FIG. 3 PRWC PROPERTY MAP
1.5 PROPERTY STATUS
The PRWC Property comprises one MTO mineral claim containing twenty cell claim
units totaling 382.01 hectares.
BC Tenure # Work Due Date Staking Date Total Area (Ha.)
----------- ------------- ------------ ----------------
981629 April 21, 2013 April 21, 2012 382.01
24
2.0 GEOLOGICAL OVERVIEW
2.1 REGIONAL AND PROPERTY GEOLOGY
The property is situated in the intermontane morphogeological belt or
superterrane of Central British Columbia. The Intermontane belt is composed of a
large number of terranes and is flanked to the east by the ancestral North
American Continent. The terranes of the intermontane belt accreted to the North
American Continent at various times starting 200 million years ago.
In general this belt, that runs parallel to the general north-westerly trend of
the Cordillera through the whole length of British Columbia, is composed of
volcanic and sedimentary rock ranging in age from Devonian to Recent and has
early Mesozoic to early Tertiary granitic intrusions.
Regionally the oldest rocks are sedimentary rocks of the Pennsylvanian Cache
Creek Terrane flanked to the east by intermediate volcanics and minor sediments
of the Middle to Upper Triassic Nicola Group of the Stikinia Terrane. The
geological history after the accretion is dominated by several episodes of
deposition of flat lying volcanic rocks and minor sediments from Eocene to
Recent. Regionally the tertiary volcanics rocks are Pliocene to recent basalt
flows and sediments of the Chilcotin group and minor coarse clastic sediments of
Pliocene to Miocene Age. The most recent regional geological event is extensive
glaciation. Glacial deposits mantle much of the plateau west and so obscure the
underlying older strata.
The whole area, like most of British Columbia, has been the subject of
systematic regional stream sediment and water surveys. The density of sampling
is approximately 1 per 10 to 20 km2. The work was done by the Geological Survey
of Canada, often in cooperation with the BC Geological survey. Several streams
that drain local basalt cap exhibit exceptionally high uranium in stream waters.
Two sample sites, located just 3km west of the PRWC claim measure 7.5 and 5.5
ppb U (see figure 5). Such values are exceptionally high, considering that
province- wide; the 98 percentile of all values of Uranium in water is 4 ppb.
The local basalt cap, of which the PRWC claim covers a portion, is
topographically higher than the water sample sites. We believe that the amounts
of uranium in streams represent the amount and rate of uranium liberated through
natural weathering processes from bedrock sources or in selected cases directly
indicate uranium mineralization.
25
The area of the claims is prospective for Basal-Type uranium deposits.
The geology and geochemistry of this type of deposits in British Columbia is
described by D. Boyle (1980) and D. Boyle and S. Ballantyne (1982). Briefly
these deposits are formed in unconsolidated stream channel sediments by uranium
rich groundwater. The deposits are preserved by basalt flows that fill in the
stream valleys and form an impermeable cap over the paleochannUranium rich
groundwater appear not only to need an uranium rich source rock such as alkaline
intrusions and volcanic rocks, but also are enhanced by large regional fault
zones. Deposition of uranium appears to need the presence of organic carbon,
such as plant material, within the stream sediments. Uranium mineralization
follows favourable parts of the paleochannels and is essentially sandwiched
between the relatively impermeable basalt flow above and impermeable
un-weathered bedrock below. Erosion, subsequent to the deposition of the basalt
flows in a river valley, will happen along the thin edges of the basalt flow.
The effect over time is an inversion of topography. The basalt covering the
paleochannel will become a topographic ridge.
The whole area, like most of British Columbia, has been the subject of
systematic regional stream sediment and water surveys. The density of sampling
is approximately 1 per 10 to 20 km2. The work was done by the Geological Survey
of Canada, often in cooperation with the BC Geological survey and is fully
depicted on the Map Place website of the B.C. Geological Survey
(http://www.em.gov.bc.ca/Mining/Geolsurv/MapPlace/). These data were used for
this report. It is believed that uranium amounts in streams represent the amount
and rate of uranium liberated through natural weathering processes from bedrock
sources or in selected cases directly indicate uranium mineralization.
Several streams that drain the local basalt cap exhibit exceptionally high
Uranium in stream waters. Two sample sites, located just 3km west of the PRWC
claim measure 7.5 and 5.5 ppb U (see figure 5). Such values are exceptionally
high, considering that province- wide; the 98 percentile of all values of
Uranium in water is 4 ppb. The local basalt cap, of which the PRWC claim covers
a portion, is topographically higher than the water sample sites.
26
[MAP SHOWING REGIONAL GEOLOGY OF THE PRWC PROPERTY]
FIG. 4 REGIONAL GEOLOGY OF THE PRWC PROPERTY
27
2.2 DEPOSIT TYPE
The area of the claims is prospective for Basal-Type Uranium deposits.
The geology and geochemistry of this type of deposits in British Columbia is
described by D. Boyle (1980) and D. Boyle and S. Ballantyne (1982). Briefly
these deposits are formed in unconsolidated stream channel sediments by uranium
rich groundwater. The deposits are preserved by basalt flows that fill in the
stream valleys and form an impermeable cap over the paleochannUranium rich
groundwater appear not only to need an uranium rich source rock such as alkaline
intrusions and volcanic rocks, but also are enhanced by large regional fault
zones. Deposition of uranium appears to need the presence of organic carbon,
such as plant material, within the stream sediments. Uranium mineralization
follows favourable parts of the paleochannels and is essentially sandwiched
between the relatively impermeable basalt flow above and impermeable
un-weathered bedrock below. Erosion, subsequent to the deposition of the basalt
flows in a river valley, will happen along the thin edges of the basalt flow.
The effect over time is an inversion of topography. The basalt covering the
paleochannel will become a topographic ridge
Because of the emplacement of Uranium mineralization between impermeable layers,
exploitation by in situ leaching is probably feasible. In situ leaching, a
technique used in the USA, Australia and in areas of the former USSR and other
locales, consist of, closely spaced, drilled injection and recovery wells and a
modestly sized plant to extract uranium from recovered solutions. In-situ
leaching has minimal impact on the environment of the area and is much less
disruptive than mining by open pit excavation.
28
[MAP SHOWING LOCAL GEOLOGY OF THE PRWC PROPERTY]
FIG. 5 LOCAL GEOLOGY OF THE PRWC PROPERTY
Figure 5 illustrates the PRWC Claim covering a portion of a 6 km long by 4 km
wide area of Chilcotin Group basalts overlying volcanic rocks of the Takla
Group. The basalt caps a local topographic ridge oriented in a northerly
direction.
29
3.0 CONCLUSIONS AND RECOMMENDATIONS
The PRWC Property claim occurs in an area with exceptionally high uranium in
stream waters and covers a portion of a 6 by 4 km cap of plateau basalt that
forms a low topographic high. It covers a section cap of plateau basalt along a
local low topographic ridge.
The Company plans to explore the area of the deposit. A proposed work program to
include construction of a control grid, geological mapping and rock sampling of
surface showings, a soil and silt geochemical sampling program, IP and
radiometric geophysical survey, and rock trenching. Based on a compilation of
these results, and if anomalous concentrations of uranium are detected from the
soil sampling campaign, drilling through the basalt, up slope from the high
uranium in soils is recommended.
PHASE 1 ESTIMATE COST
Phase 1 includes mapping the extent of the basalt cap and
reconnaissance soil sampling. Available maps of the area are
regional and insufficiently detailed. The contact zone of the
basalt cap, once mapped, needs to be systematically sampled at
200 meter intervals. This would detect uranium leaching from a
paleochannels or from mineralized paleochannels uncovered by
erosion of the basalt cap. Phase 1 to include: Reconnaissance
geological mapping, prospecting and rock sampling; five days on
site, two days travel, three days report preparation. Truck
rental, rock samples, field supplies, report and reproduction
costs, Hired Senior Geologist, Consultant/Project Manager and
Blaster/Geological Assistant. $ 30,000.00
PHASE 2 ESTIMATE COST
Phase 2 of exploration is to consist of detailed geochemical soil
sampling (50 meter intervals along 50 meter spaced lines) silt
geochemical survey, and radiometric surveys over all areas.
Detailed geological mapping and rock sampling, geophysical grid
construction (EM, Manetometer), geochemical soil sampling and
silt geochemical survey, IP survey, establish drill and trenching
targets. $100,000.00
PHASE 3 ESTIMATE COST
Phase 3 1000 metres of drilling; if anomalous concentrations of
uranium are detected drilling through the basalt, up slope from
the high uranium in soils is recommended. Phase 3 includes
Geological supervision, camp and supplies, transportation,
assays, report and other ancillary costs. $230,000.00
-----------
TOTAL $360,000.00
===========
30
COMPLIANCE WITH GOVERNMENT REGULATION
We will be required to conduct all mineral exploration activities in accordance
with government regulations. Such operations are subject to various laws
governing land use, the protection of the environment, production, exports,
taxes, labor standards, occupational health, waste disposal, toxic substances,
well safety and other matters. Unfavorable amendments to current laws,
regulations and permits governing operations and activities of resource
exploration companies, or more stringent implementation thereof, could have a
materially adverse impact and cause increases in capital expenditures which
could result in a cessation of operations.
British Columbia's reclamation laws ensure that, once operations cease, mine
site lands are returned to a useful and productive state. Before any work on a
new mine site can commence, the company or individual doing the work must post a
security which is held in trust by the Ministry of Energy and Mines. This
security is returned only once the mine site is reclaimed to a satisfactory
level and there are no ongoing monitoring or maintenance requirements. If a mine
site is not reclaimed properly, the security money may be used by the Ministry
to complete the remediation work. The intent of the Province's reclamation
legislation is to ensure that modern mine sites in B.C. do not leave an ongoing
legacy or require public funds for clean-up activities.
The Mines and Mineral Resources Division (MMD) of the Ministry of Energy and
Mines (MEM) is responsible for the regulation of mining in British Columbia. The
Mines Act and accompanying Health, Safety and Reclamation Code for Mines in
British Columbia (the Code) provide the legislative framework and apply equally
to all operations.
Legislation requires all mining operations to carry out a program of
environmental protection and reclamation to ensure that upon termination of
mining, land, watercourses and cultural heritage resources will be returned to a
safe and environmentally sound state and to an acceptable end land use. MMD is
responsible for issuing and administering Mines Act permits. Before the
commencement of any work in or about a mine, the owner, agent, manager or person
acting on behalf of the company must hold a permit issued by the Chief Inspector
of Mines (pursuant to Section 10 of the Mines Act).
MEM seeks to provide reasonable assurance that the Province will not have to
contribute to the costs of reclamation if a mining company defaults on its
reclamation obligations. As a condition of Mines Act permits, the permittee must
post financial security in an amount and form acceptable to the Chief Inspector
of Mines. This security is held by the government until the Chief Inspector is
satisfied that all reclamation requirements for the operation have been
fulfilled.
Every mine site has unique management requirements and operational constraints;
thus, the assessment of financial security is done on a site-specific basis. The
security is set at a level that reflects all outstanding reclamation and closure
obligations. For example, mines that require long-term drainage treatment for
metal leaching and/or acid rock drainage require full security to cover
outstanding liability and ongoing management. The Chief Inspector of Mines
accepts the following forms of reclamation security: cash, certified cheques,
bank drafts, term deposits (i.e., GICs), Government of Canada bonds and
irrevocable standby letters of credit (ISLOCs).
Term deposits and bonds may be held in a Safekeeping Agreement where the
interest accrues on the deposit. In some cases, funds may be deposited to the
Mine Reclamation Fund (pursuant to Section 12 of the Mines Act) or within a
Qualified Environmental Trust. These funds allow interest to accrue to the
credit of the account. For ISLOCs, confirmation is provided by the client's
financial institution that sufficient funds exist and will be kept available by
the financial institution to meet MEMPR's requirements.
31
Reclamation securities can only be released by the authority of the Chief
Inspector of Mines.
EMPLOYEES
At present, we have no employees. We anticipate that we will be conducting most
of our business through agreements with consultants and third parties.
DESCRIPTION OF PROPERTY
Our offices are located at 14727 - 129th Street, Edmonton, Alberta T6V 1C4.
LEGAL PROCEEDINGS
The Company is not a party to any legal proceeding. No property of the Company
is the subject of a pending legal proceeding.
MARKET PRICE OF DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDERS MATTERS
DIVIDENDS
The Company has never paid cash dividends on common stock, and does not expect
to pay such dividends in the foreseeable future.
MARKET INFORMATION
The Company's common shares do not trade and are not listed or quoted on any
public market.
STOCKHOLDERS
There is one stockholder of the Company's common stock.
EMERGING GROWTH COMPANY STATUS UNDER THE JOBS ACT
Chum Mining Group Inc. qualifies as an "emerging growth company" as defined in
the Jumpstart our Business Startups Act (the "JOBS Act"). As an "emerging growth
company", the exemptions listed below are all available to the Company as a
Smaller Reporting Company.
The JOBS Act creates a new category of issuers known as "emerging growth
companies." Emerging growth companies are those with annual gross revenues of
less than $1 billion (as indexed for inflation) during their most recently
completed fiscal year. The JOBS Act is intended to facilitate public offerings
by emerging growth companies by exempting them from several provisions of the
Securities Act of 1933 and its regulations. An emerging growth company will
retain that status until the earliest of:
* The first fiscal year after its annual revenues exceed $1 billion;
* The first fiscal year after the fifth anniversary of its IPO;
* The date on which the company has issued more than $1 billion in
non-convertible debt during the previous three-year period; and
* The first fiscal year in which the company has a public float of at
least $700 million.
32
FINANCIAL AND AUDIT REQUIREMENTS
Under the JOBS Act, emerging growth companies are subject to scaled financial
disclosure requirements. Pursuant to these scaled requirements, emerging growth
companies may:
* Provide only two rather than three years of audited financial
statements in their IPO Registration Statement;
* Provide selected financial data only for periods no earlier than those
included in the IPO Registration Statement in all SEC filings, rather
than the five years of selected financial data normally required;
* Delay compliance with new or revised accounting standards until they
are made applicable to private companies; and
* Be exempted from compliance with Section 404(b) of the Sarbanes-Oxley
Act, which requires companies to receive an outside auditor's
attestation regarding the issuer's internal controls.
OFFERING REQUIREMENTS
In addition, during the IPO offering process, emerging growth companies are
exempt from:
* Restrictions on analyst research prior to and immediately after the
IPO, even from an investment bank that is underwriting the IPO;
* Certain restrictions on communications to institutional investors
before filing the IPO registration statement; and
* The requirement initially to publicly file IPO Registration
Statements. Emerging growth companies can confidentially file draft
Registration Statements and any amendments with the SEC. Public
filings of the draft documents must be made at least 21 days prior to
commencement of the IPO "road show."
OTHER PUBLIC COMPANY REQUIREMENTS
Emerging growth companies are also exempt from other ongoing obligations of most
public companies, such as:
* The requirements under Section 14(i) of the Exchange Act and Section
953(b)(1) of the Dodd-Frank Act to disclose executive compensation
information on pay-for-performance and the ratio of CEO to median
employee compensation;
* Certain other executive compensation disclosure requirements, such as
the compensation discussion and analysis, under Item 402 of Regulation
S-K; and
* The requirements under Sections 14A(a) and (b) of the Exchange Act to
hold advisory votes on executive compensation and parachute payments.
ELECTION UNDER SECTION 107(B) OF THE JOBS ACT
As an emerging growth company we have made the irrevocable election to not adopt
the extended transition period for complying with new or revised accounting
standards under Section 107(b), as added by Section 102(b), of the JOBS Act.
This election allows companies to delay the adoption of new or revised
accounting standards that have different effective dates for public and private
companies until those standards apply to private companies.
33
MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and the notes to
those statements included elsewhere in this prospectus. In addition to the
historical financial information, the following discussion and analysis contains
forward-looking statements that involve risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth under "Risk
Factors" and elsewhere in this prospectus.
PLAN OF OPERATIONS
Our business plan is to proceed with the exploration of our property as outlined
above. If the Company is successful in raising adequate capital through private
placements or debt financing, the Company anticipates completing the first phase
in Spring 2013 and commencing the second and third phase in Summer and Fall
2013. We have decided to proceed with the exploration program provided to the
Company by the vendor of the Property, Jervis Explorations Inc. The exploration
program was developed by Gregory R Thomson, Geoscientist and Consulting
Geologist, who developed an exploration program in 2007 for the Property prior
to the Company purchasing these mineral claims. The proposed work program
includes prospecting, geological mapping and rock sampling of any mineralized
surface showings, construction of a control grid, geochemical soil sampling, and
geophysical surveys. Based on the compilation of these results, a diamond drill
program would be designed to explore and define the potential resources. The
anticipated costs of this development are presented in three results-contingent
stages.
This program is exploratory in nature. The anticipated costs of this exploration
are presented in three results-contingent stages.
PHASE 1 ESTIMATE COST
Phase 1 includes mapping the extent of the basalt cap and
reconnaissance soil sampling. Available maps of the area are
regional and insufficiently detailed. The contact zone of the
basalt cap, once mapped, needs to be systematically sampled at
200 meter intervals. This would detect uranium leaching from a
paleochannels or from mineralized paleochannels uncovered by
erosion of the basalt cap. Phase 1 to include: Reconnaissance
geological mapping, prospecting and rock sampling; five days on
site, two days travel, three days report preparation. Truck
rental, rock samples, field supplies, report and reproduction
costs, Hired Senior Geologist, Consultant/Project Manager and
Blaster/Geological Assistant. $ 30,000.00
PHASE 2 ESTIMATE COST
Phase 2 of exploration is to consist of detailed geochemical soil
sampling (50 meter intervals along 50 meter spaced lines) silt
geochemical survey, and radiometric surveys over all areas.
Detailed geological mapping and rock sampling, geophysical grid
construction (EM, Manetometer), geochemical soil sampling and
silt geochemical survey, IP survey, establish drill and trenching
targets. $100,000.00
PHASE 3 ESTIMATE COST
Phase 3 1000 metres of drilling; if anomalous concentrations of
uranium are detected drilling through the basalt, up slope from
the high uranium in soils is recommended. Phase 3 includes
Geological supervision, camp and supplies, transportation,
assays, report and other ancillary costs. $230,000.00
-----------
TOTAL $360,000.00
===========
34
We anticipate that the phases of the recommended geological exploration program
will cost approximately $360,000. We had $19,825 in cash reserves as of July 31,
2012. The lack of cash has kept us from conducting any exploration work on the
property. If the Company is unsuccessful in raising the capital to commence its
exploration program, the Company will be required to pay a government fee of
$3,820 in order to keep the claims valid. The Company currently has enough cash
on hand to pay this fee.
We anticipate that we will incur the following expenses over the next twelve
months:
* $3,820 to be paid to the British Columbia Provincial Government to
keep the claims valid on or before April 21, 2013;
* $30,000 in connection with the completion of Phase 1 of our planned
geological work program;
* $100,000 in connection with the completion of Phase 2 of our planned
geological work program;
* $230,000 for Phase 3 of our planned geological work program, and
* $2,675 for operating expenses, including professional legal and
accounting expenses associated with compliance with the periodic
reporting requirements after we become a reporting issuer under the
Securities Exchange Act of 1934, but excluding expenses of the
offering.
If we determine not to proceed with further exploration of our mineral claims
due to a determination that the results of our initial geological program do not
warrant further exploration or due to an inability to finance further
exploration, we plan to pursue the acquisition of an interest in other mineral
claims. We anticipate that any future acquisition would involve the acquisition
of an option to earn an interest in a mineral claim as we anticipate that we
would not have sufficient cash to purchase a mineral claim of sufficient merit
to warrant exploration. This means that we might offer shares of our stock to
obtain an option on a property. Once we obtain an option, we would then pursue
finding the funds necessary to explore the mineral claim by one or more of the
following means: engaging in an offering of our stock; engaging in borrowing; or
locating a joint venture partner or partners.
RESULTS OF OPERATIONS
We have not yet earned any revenues. We anticipate that we will not earn
revenues until such time as we have entered into commercial production, if any,
of our mineral properties. We are presently in the exploration stage of our
business and we can provide no assurance that we will discover commercially
exploitable levels of mineral resources on our properties, or if such resources
are discovered, that we will enter into commercial production of our mineral
properties.
LIQUIDITY AND CAPITAL RESOURCES
The company had current assets of $19,825 consisting only of cash as of July 31,
2012. The Company has incurred a net loss of $10,175 for the period from
inception to July 31, 2012. Income represents all of the company's revenue less
all its expenses in the period incurred. The Company has no revenues as of July
31, 2012 and has incurred expenses of $10,175 since inception. There are no
current or long-term liabilities. The company issued to the founder 18,000,000
common shares of stock for $30,000. As of July 31, 2012, there are Eighteen
Million (18,000,000) shares issued and outstanding at a par value of $0.001 per
share. There are no preferred shares authorized. The Company has no stock option
plan, warrants or other dilutive securities.
35
With its current assets, the Company can remain operational through 2012 if it
does not complete Phase 1 of its program and only pays the government fees to
keep the claims valid, as well as the $2,675 for operating costs, including
professional legal and accounting expenses associated with compliance with the
periodic reporting requirements after we become a reporting issuer under the
Securities Exchange Act of 1934, plus the expenses of the offering.
However, the Company plans to raise the capital necessary to fund our business
through a private placement and public offering of our common stock. The Company
intends to work directly with private placees once this registration statement
is declared effective. The Company anticipates that they will have either a
private placement or additional funding from its founder by late Spring 2013 in
order to conduct its operations.
Based on our current operating plan, we do not expect to generate revenue that
is sufficient to cover our expenses for at least the next twelve months. In
addition, we do not have sufficient cash and cash equivalents to execute our
operations for at least the next twelve months. We will need to obtain
additional financing to operate our business for the next twelve months. We will
raise the capital necessary to fund our business through a private placement and
public offering of our common stock. Additional financing, whether through
public or private equity or debt financing, arrangements with stockholders or
other sources to fund operations, may not be available, or if available, may be
on terms unacceptable to us. Our ability to maintain sufficient liquidity is
dependent on our ability to raise additional capital. If we issue additional
equity securities to raise funds, the ownership percentage of our existing
stockholders would be reduced. New investors may demand rights, preferences or
privileges senior to those of existing holders of our common stock. Debt
incurred by us would be senior to equity in the ability of debt holders to make
claims on our assets. The terms of any debt issued could impose restrictions on
our operations. If adequate funds are not available to satisfy either short or
long-term capital requirements, our operations and liquidity could be materially
adversely affected and we could be forced to cease operations. The financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and classification of
liabilities that might be necessary in the event the Company cannot continue in
existence.
CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
For the audited period ended July 31, 2012, we engaged M&K CPAS, PLLC, as our
principal accountant for the purposes of auditing our financial statements.
There are not and have not been any disagreements between the Company and our
accountants on any matter of accounting principles, practices or financial
statement disclosure.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company currently has no revenues. The Company's financial instruments are
comprised of payables which are subject to normal credit risks.
DIRECTORS AND EXECUTIVE OFFICERS
1. EXECUTIVE OFFICERS
The Company's Executive Officers are as follows:
Wayne Cadence Chief Executive Officer, Chief Financial
Officer, President, Secretary, Treasurer and
Director (Principal Executive Officer and
Principal Accounting Officer)
36
BIOGRAPHY OF WAYNE CADENCE
Wayne Cadence, aged 64
Wayne Cadence is a versatile professional with extensive work experience in the
Information Technology industry. From 1996 through the present he has worked as
an Instructor and Program Coordinator/Program Chair in the Computer Systems
Technology Course for the Northern Alberta Institute of Technology. From 1988 to
present he has been the President of Eagle Consulting Services and from 2000 -
present he has been a President for C & G Inc., both Companies specializing in
Leadership training and development. Mr. Cadence has a Bachelor of Commerce from
the University of Alberta, and a Masters in Distance Education from Athabasca
University.
2. DIRECTORS
Name Position
---- --------
Wayne Cadence Sole Director
See biography above.
As sole director and officer shareholder, Mr. Cadence is not an independent
director that is independent under the independence standards applicable to the
registrant under paragraph (a)(1) of Item 407(a) of regulation S-K or under
NASDAQ Listing Rule 5605(b)(1).
EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE
SUMMARY COMPENSATION TABLE (All figures are in US dollars) The following table
sets forth the overall compensation earned in the period from inception to July
31, 2012 by (1) each person who served as the principal executive officer of the
Company for fiscal year 2012; (2) the Company's most highly compensated
executive officers with compensation of $100,000 or more during 2012 fiscal
year; and (3) those individuals, if any, who would have otherwise been in
included in section (2) above but for the fact that they were not serving as an
executive of the Company as of July 31, 2012.
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Fiscal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($)
-------- ---- --------- -------- --------- --------- --------------- ----------- ---------------
Wayne Cadence 2012 Nil Nil Nil Nil Nil Nil Nil
Chief Executive
Officer, Chief
Financial Officer,
President, Secretary,
Treasurer and
Director
(Principal Executive
Officer and Principal
Accounting Officer)
37
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of July 31, 2012, there were Eighteen Million (18,000,000) shares of common
stock issued and outstanding.
(1) This table is based on Eighteen Million (18,000,000) shares of common stock
outstanding As of the date of this prospectus, we had the following security
holder holding greater than 5%:
Percentage of Class
Name & Address of Owner Amount and Nature of Before After
and Position if Applicable Beneficial Ownership Offering Offering
-------------------------- -------------------- -------- --------
Wayne Cadence 18,000,000 100% 44%
1427 - 129th Street
Edmonton, Alberta T6V 1C4
Chief Executive Officer,
Chief Financial Officer,
President, Secretary, Treasurer
and Director (Principal Executive
Officer and Principal Accounting
Officer)
Total Officers, Directors &
Significant Shareholders as
a group 18,000,000 100% 44%
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
As of the date of this statement, the Company has entered into an agreement
whereby it has sold 18,000,000 shares to its founder for total proceeds of
$30,000.
The Company entered into a one-year renewable management contract with our
director, Wayne Cadence, whereby it agreed to pay him $2,000 upon signing of the
contract, and $8,000 upon completion.
Outside of the above noted transactions, there are no, and have not been since
inception, any other material agreements or proposed transactions, whether
direct or indirect, with any of the following:
* Any of our directors or officers;
* Any nominee for election as a director;
* The principal security holder(s) identified in the preceding Security
Ownership of Certain Beneficial Owners and Management " section; or
* Any relative or spouse, or relative of such spouse, of the above
referenced persons;
* Any promoters.
38
Chum Mining Group Inc.
(An Exploration Stage Company)
Financial Statements
For the period June 1, 2012 (inception) through July 31, 2012
Report of Independent Registered Public Accounting Firm F-2
Balance Sheet F-3
Statement of Operations F-4
Statement of Stockholder's Equity F-5
Statement of Cash Flows F-6
Notes to the Financial Statements F-7
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Chum Mining Group Inc.
(An Exploration Stage Company)
We have audited the accompanying balance sheet of Chum Mining Group Inc. (an
Exploration Stage Company) as of July 31, 2012 and the related statements of
operations, changes in stockholders' equity, and cash flows for the period from
June 1, 2012 (inception) through July 31, 2012. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chum Mining Group Inc., as of
July 31, 2012, and the results of its operations and cash flows for the periods
described above in conformity with U.S. generally accepted principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has incurred a net loss from operations and
has no source of revenues, which raises substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters also are
described in Note 6. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ M&K CPAS, PLLC
------------------------------
www.mkacpas.com
Houston, Texas
November 30, 2012
F-2
Chum Mining Group Inc.
(An Exploration Stage Company)
Balance Sheet
(Stated in US Dollars)
Audited
July 31, 2012
-------------
Assets
Current assets
Cash $ 19,825
--------
Total current assets 19,825
--------
Total Assets $ 19,825
========
Liabilities and Stockholder's Equity
Current liabilities
Total current liabilities $ --
--------
Total Liabilities --
--------
Stockholder's Equity
Common Stock, $0.001 par value
75,000,000 common shares authorized
18,000,000 shares issued and outstanding 18,000
Additional paid-in capital 12,000
Deficit accumulated during exploration period (10,175)
--------
Total stockholder's equity 19,825
--------
Total liabilites and stockholder's equity $ 19,825
========
The accompanying notes are an integral part of these financial statements.
F-3
Chum Mining Group Inc.
(An Exploration Stage Company)
Statement of Operations
(Stated in US Dollars)
Audited
From inception
(June 1, 2012)
to
July 31, 2012
-------------
Revenue $ --
------------
Expenses
Recognition of an Impairment Loss (Property Expenses) 7,500
Accounting & professional fees 2,675
------------
Total expenses 10,175
Net loss from operations (10,175)
------------
Net loss $ (10,175)
============
Basic & diluted loss per common share $ (0.00)
------------
Weighted average number of common shares 18,000,000
The accompanying notes are an integral part of these financial statements.
F-4
Chum Mining Group Inc.
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
From Inception (June 1, 2012) to July 31 , 2012
Audited
Deficit
Accumulated
Common Stock During
---------------------- Paid In Exploration
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Issuance of 18,000,000 shares
at $0.00167 per share 18,000,000 $ 18,000 $ 12,000 $ -- $ 30,000
Net operating loss for the
period ended July 31, 2012 (10,175) (10,175)
---------- -------- -------- --------- ---------
Balance, June 30, 2012 18,000,000 $ 18,000 $ 12,000 $ (10,175) $ 19,825
========== ======== ======== ========= =========
The accompanying notes are an integral part of these financial statements.
F-5
Chum Mining Group Inc.
(An Exploration Stage Company)
Statement of Cash Flows
(Stated in US Dollars)
Audited
From inception
(June 1, 2012)
to
July 31, 2012
-------------
OPERATING ACTIVITIES
Net income (loss) $(10,175)
Recognition of an Impairment Loss (Mineral Claims) 7,500
Accounts payable and accrued liability --
--------
NET CASH USED IN OPERATING ACTIVITIES (2,675)
INVESTING ACTIVITIES
Purchase of mineral claim (7,500)
--------
NET CASH USED IN INVESTING ACTIVITIES (7,500)
FINANCING ACTIVITIES
Shares issued to founders for cash 30,000
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 30,000
NET CHANGE IN CASH 19,825
Cash at beginning of period --
--------
CASH AT END OF PERIOD $ 19,825
========
Cash Paid For:
Interest $ --
========
Income Tax $ --
========
The accompanying notes are an integral part of these financial statements.
F-6
Chum Mining Group Inc.
(An Exploration Stage Company)
Notes to Financial Statements
July 31, 2012
1. ORGANIZATION
The Company was incorporated under the laws of the state of Nevada on June 1,
2012 with 75,000,000 authorized common shares with a par value of $0.001.
The Company was organized for the purpose of acquiring, exploring and developing
mineral claims. The company has acquired a mineral claim with unknown reserves.
The Company does not presently have any operations and is considered to be in
the exploration stage.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.
Dividend policy
The Company has not yet adapted a policy regarding payment of dividends.
Cash and Cash Equivalent
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents. As of July 31,
2012, there were no cash equivalents.
Income Taxes
The Company utilizes the liability method of accounting for income taxes. Under
the liability method deferred tax assets and liabilities are determined based on
the differences between financial reporting and the tax bases of the assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect, when the differences are expected to be reverse. An allowance against
deferred tax assets is recorded, when it is more likely than not that such tax
benefits will not be realized.
On July 31, 2012, the company had a net operating loss available for
carryforward of $10,175.
Basic and Diluted Net Income (loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 260,
Earnings per Share. ASC 260 requires presentation of both basic and diluted
earnings per share ("EPS") on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares if their effect is anti
dilutive.
F-7
Foreign Currency Translation
The Company's functional and reporting currency is the United States dollar.
Foreign currency transactions are primarily undertaken in Canadian dollars.
Foreign currency transactions are translated to United States dollars in
accordance with ASC 830, Foreign Currency Translation Matters, using the
exchange rate prevailing at the balance sheet date. Gains and losses arising on
translation or settlement of foreign currency denominated transactions or
balances are included in the determination of income.
Financial Instruments
Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is
required to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. ASC 820 establishes a fair value
hierarchy based on the level of independent, objective evidence surrounding the
inputs used to measure fair value. A financial instrument's categorization
within the fair value hierarchy is based upon the lowest level of input that is
significant to the fair value measurement. ASC 820 prioritizes the inputs into
three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in
active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than
quoted prices that are observable for the asset or liability such as quoted
prices for similar assets or liabilities in active markets; quoted prices for
identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs
to the valuation methodology that are significant to the measurement of the fair
value of the assets or liabilities.
Description Level 1 Level 2 Level 3
------- ------- -------
None None None
The Company's financial instruments consist principally of cash. Pursuant to ASC
820, the fair value of cash is determined based on "Level 1" inputs, which
consist of quoted prices in active markets for identical assets. The recorded
values of all other financial instruments approximate their current fair values
because of their nature and respective maturity dates or durations.
Revenue Recognition
We recognize revenue when all of the following conditions are satisfied: (1)
there is persuasive evidence of an arrangement; (2) the product or service has
been provided to the customer; (3) the amount of fees to be paid by the customer
is fixed or determinable; and (4) the collection of our fees is probable. The
Company has recognized no revenue to date.
F-8
Impairment of Long-Lived Assets
The Company reviews and evaluates long-lived assets for impairment when events
or changes in circumstances indicate that the related carrying amounts may not
be recoverable. The assets are subject to impairment consideration under ASC
360-10-35-17 if events or circumstances indicate that their carrying amount
might not be recoverable. When the Company determines that an impairment
analysis should be done, the analysis will be performed using the rules of ASC
930-360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment or
Disposal of Long-Lived Assets.
Environmental requirements
At the report date environmental requirements related to a formally held mineral
claim are unknown and therefore any estimate of future costs cannot be made.
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718,
Compensation - Stock Compensation using the fair value method. All transactions
in which goods or services are the consideration received for the issuance of
equity instruments are accounted for based on the fair value of the
consideration received or the fair value of the equity instrument issued,
whichever is more reliably measurable. Equity instruments issued to employees
and the cost of the services received as consideration are measured and
recognized based on the fair value of the equity instruments issued. As at July
31, 2012, the Company did not grant any stock options.
Mineral Property Acquisitions Costs
Costs of acquisition and option costs of mineral rights are capitalized upon
acquisition. Mine development costs incurred to develop new ore deposits, to
expand the capacity of mines, or to develop mine areas substantially in advance
of current production are also capitalized once proven and probable reserves
exist and the property is a commercially mineable property. Costs incurred to
maintain current production or to maintain assets on a standby basis are charged
to operations. If the Company does not continue with exploration after the
completion of the feasibility study, the mineral rights will be expensed at that
time. Costs of abandoned projects are charged to mining costs including related
property and equipment costs. To determine if these costs are in excess of their
recoverable amount periodic evaluation of carrying value of capitalized costs
and any related property and equipment costs are based upon expected future cash
flows and/or estimated salvage value in accordance with Accounting Standards
Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
Various factors could impact our ability to achieve forecasted production
schedules. Additionally, commodity prices, capital expenditure requirements and
reclamation costs could differ from the assumptions the Company may use in cash
flow models from exploration stage mineral interests involves further risks in
addition to those factors applicable to mineral interests where proven and
proven and probable reserves have been identified, due to the lower level of
confidence that the identified mineralized material can ultimately be mined
economically.
Assets Retirement Obligations
The Company follows the provisions of ASC 410, Asset Retirement and
Environmental Obligations, which establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment or other disposal of long-lived tangible assets arising from the
acquisition, construction or development and for normal operations of such
assets.
F-9
Exploration Stage Company
The Company is an exploration stage company as defined by Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 915,
Development Stage Entities.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with general accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
Recent Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board ("FASB") issued ASU
2011-12, Comprehensive Income. ASU 2011-12 deferred the new presentation
requirements outlined by ASU 2011-05 regarding reclassification of items out of
accumulated other comprehensive income. This standard is effective for all
annual period beginning after December 15, 2011. This standard is not expected
to have a material impact on the Company's financial statements.
In December 2011, the FASB issued ASU 2011-11, Balance Sheet: Disclosures about
Offsetting Assets and Liabilities. ASU 2011-11 requires entities to disclose
both the gross and net information about both instruments and transactions
subject to an agreement similar to a master netting arrangement and includes
derivatives, sale and repurchase agreements, and securities borrowing and
securities lending arrangements. This standard is effective for all fiscal
periods beginning on or after January 1, 2013. This standard is not expected to
have a material impact on the Company's financial statements.
In June 2011, the FASB issued ASU 2011-05, Comprehensive Income: Presentation of
Comprehensive Income. ASU 2011- 05 eliminates the option to present components
of other comprehensive income as part of the statement of changes in
stockholders' equity and items reclassified to the statement of operations are
required to be presented separately on the face of the financial statements.
This standard is effective for fiscal years beginning after December 15, 2011.
This standard is not expected to have a material impact on the Company's
financial statements.
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement: Amendments to
Achieve Common Fair Value Measure and Disclosure Requirements in US GAAP and
IFRS. ASU 2011-04 amended the definition of fair value measurement to be more
closely aligned with IFRS including: (1) for Level 3 fair value measurements,
quantitative information about unobservable inputs used, a description of the
valuation processes used by the entity, and a qualitative discussion about the
sensitivity of the measurements to changes in the unobservable inputs; (2) for
an entity's use of a nonfinancial asset that is different from the asset's
highest and best use, the reason for the difference; (3) for financial
instruments not measured at fair value but for which disclosure of fair value is
required, the fair value hierarchy level in which the fair value measurements
were determined; and (4) the disclosure of all transfers between Level 1 and
Level 2 of the fair value hierarchy. This standard is effective for all fiscal
periods beginning after December 15, 2011. This standard is not expected to have
a material impact on the Company's financial statements.
F-10
3. ACQUISITION OF A MINERAL CLAIM
During 2012 the Company acquired mineral claims for $7,500 known as the PRWC
Uranium Property.
The Company is engaged in the exploration for uranium and other minerals. The
Company has acquired one MTO mineral claim totaling 382.01 hectares. It is
located in the Region of central British Columbia, about 20 km southwest of the
Town of Prince George, BC on NTS Sheet 93G (Latitude: 51(0) 39' 12"N and
Longitude: 123(0) 1' 13" W). The property can be accessed via Highway 16 and by
the dense network of logging roads in the area.We refer to these mining claims
as the PRWC Uranium Property. This property is without known reserves.
The acquisitions costs have been impaired and expensed during 2012 because there
had been no exploration activities nor had there been any reserves established
and we could not project any future cash flows or salvage value and the
acquisition costs were not recoverable.
4. CAPITAL STOCK
The authorized capital is 75,000,000 shares of common stock at $0.001 par value.
On June 1, 2012, the Company issued 18,000,000 private placement common shares
to its founder for cash of $30,000.
5. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES
Officer-directors have acquired 100% of the outstanding common capital stock of
the company.
6. GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company does not have a sufficient
working capital for its planned activity, and to service its debt, which raises
substantial doubt about its ability to continue as a going concern.
Continuation of the company as a going concern is dependent upon obtaining
additional working capital and the management of the Company has developed a
strategy which it believes will accomplish this objective through short term
loans from an officer-director, and additional equity investments, which will
enable the Company to continue operations for the coming year.
F-11
7. INCOME TAX
The Company has $10,175 of net operating losses carried forward to offset
taxable income in future years which expire commencing in fiscal 2026. The
income tax benefit differs from the amount computed by applying the US federal
income tax rate of 34% to net loss before income taxes. As at July 31, 2012, the
Company had no uncertain tax positions.
June 1, 2012
(inception)
Through
July 31, 2012
-------------
Net Loss Before Taxes $2,675
Statutory Rate 34%
Computed expected tax recovery 910
Change in valuation allowance (910)
------
Income tax provision $ --
======
8. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through
to the date of this report and has found no material event to report.
F-12
DEALER PROSPECTUS DELIVERY OBLIGATION
Until December 28, 2012, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by us in connection with the securities being registered
are as follows:
Amount
---------
Securities and Exchange Commission Registration Fee...... $ 2.73*
Audit Fees and Expenses.................................. 3,500.00
Legal Fees and Expenses.................................. 1,000.00
Transfer Agent and Registrar Fees and Expenses........... 560.00
Miscellaneous Expenses................................... 940.00
---------
Total................................................... $6,002.73*
=========
----------
* Estimated amount
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.7502 of the Nevada Revised Statutes and Article IX of our Corporate
Bylaws permit us to indemnify our officers and directors and certain other
persons against expenses in defense of a suit to which they are parties by
reason of such office, so long as the persons conducted themselves in good faith
and the persons reasonably believed that their conduct was in our best interests
or not opposed to our best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Indemnification is not permitted in connection with a proceeding by us or in our
right in which the officer or director was adjudged liable to us or in
connection with any other proceeding charging that the officer or director
derived an improper personal benefit, whether or not involving action in an
official capacity.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The Company issued 18,000,000 shares of common stock to the founder, Wayne
Cadence, at a price of $0.00167 per share, for total proceeds of $30,000. These
shares were issued pursuant to Section 4(2) of the Securities Act. The
18,000,000 shares of common stock are restricted shares as defined in the
Securities Act. This issuance was made to the Company's founder who is a
sophisticated investor. As promoter of our Company since our inception, the
founder is in a position of access to relevant and material information
regarding our operations.
II-1
ITEM 16. EXHIBITS
The following exhibits are included as part of this Form S-1 or are incorporated
by reference to our previous filings:
Exhibit No. Description
----------- -----------
3.1 Articles of Incorporation
3.2 Bylaws
5.1 Legal Opinion of Diane Dalmy, Attorney at Law, November 30, 2012
10.1 Asset Purchase Agreement
23.1 Consent of M & K CPAS PLLC, November 30, 2012
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to selling stockholder
Mr. Cadence, the underwriter, at the closing specified in the underwriting
agreements certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (ss.230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement.
II-2
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements
required by "Item 8.A. of Form 20-F (17 CFR 249.220f)" at the start of any
delayed offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, PROVIDED that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph (a)(4) and other information necessary to ensure that all other
information in the prospectus is at least as current as the date of those
financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3 (ss.239.33 of this chapter), a
post-effective amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act or ss.210.3-19 of this
chapter if such financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Form F-3.
(5) That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
(i) If the registrant is relying on Rule 430B (ss.230.430B of this chapter):
(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3)
(ss.230.424(b)(3) of this chapter) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part of
and included in the registration statement; and
(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) (ss.230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a
registration statement in reliance on Rule 430B relating to an offering made
pursuant to Rule 415(a)(1)(i), (vii), or (x) (ss.230.415(a)(1)(i), (vii), or (x)
of this chapter) for the purpose of providing the information required by
section 10(a) of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form
of prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new effective
date of the registration statement relating to the securities in the
registration statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial BONA FIDE
offering thereof. PROVIDED, HOWEVER, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such effective date,
II-3
supersede or modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in any such
document immediately prior to such effective date; or
(ii) If the registrant is subject to Rule 430C (ss.230.430C of this chapter),
each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A (ss.230.430A
of this chapter), shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. PROVIDED,
HOWEVER, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
(6) That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities:
The undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of
any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424 (ss.230.424
of this chapter);
(ii) Any free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement Form S-1 to be signed on its behalf by
the undersigned, in the City of Edmonton, Alberta on November 30, 2012.
CHUM MINING GROUP INC.
By: /s/ Wayne Cadence
---------------------------------------
Wayne Cadence,
Chief Executive Officer, Chief Financial
Officer, (Principal Executive Officer and
Principal Accounting Officer)
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following person, in the capacity and on the
date indicated.
Signature Title Date
--------- ----- ----
/s/ Wayne Cadence Chief Executive Officer, November 30, 2012
--------------------------- Chief Financial Officer, President,
Wayne Cadence Secretary, Treasurer and Director
(Principal Executive Officer and
Principal Accounting Officer)
II-

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